Brown v. Total Quality Logistics

UNITED STATES DISTRICT COURT

SOUTHER DISTRICT OF OHIO

WESTERN DIVISION

TIFFANY BROWN, Case No. 1:19-cv-574

Plaintiff, McFarland, J.

Litkovitz, M.J.

vs.

TOTAL QUALITY LOGISTICS, LLC., ORDER AND REPORT AND

Defendant. RECOMMENDATION

Proceeding pro se, plaintiff Tiffany Brown brings this breach of contract action against

defendant Total Quality Logistics (“TQL”). This matter is before the Court on defendant’s

motion for judgment on the pleadings, or alternatively motion to dismiss (Doc. 5),1 plaintiff’s

response in opposition (Doc. 7), and defendant’s reply memorandum (Doc. 12). This matter is

also before the Court on two of plaintiff’s motions to receive service by email through the

electronic case filing system (Docs. 2, 8) and plaintiff’s motion to access the electronic case

filing system (Doc. 9).

I. Facts

Plaintiff filed her complaint in this Court on July 15, 2019. (Doc. 1). In her complaint,

plaintiff alleges the following:

Plaintiff’s company, Tribute Contracting LLC, used the Defendant’s services on

October 2017 for deliveries [sic] their substantial government contract. Plaintiff

has signed a contract with Defendant. The first shipment arrived on time with the

first supplier. The first shipment for 2nd supplier was one day late. This shipment

caused the contract to be cancelled by the government agency. This has caused

substantial financial damages to my client as the total value of the contract was

$155 million. There has also been significant reputational damage that [h]as

affected my client’s ability to conduct business in the industry. Plaintiff’s company

received extremely negative press and is currently fighting an [sic] 7 year

disbarment of irreputable harm personally as well professional[ly].

1 The Court will apply the Rule 12(b)(6) motion to dismiss standard to defendant’s motion. A motion for judgment

on the pleadings is premature without an answer filed by defendant. See Fed. R. Civ. P. 12(c) (“After the pleadings

are closed—but early enough not to delay trial—a party may move for judgment on the pleadings.”).

(Doc. 1 at 4). Based on these facts, plaintiff brings a breach of contract claim against TQL for

the late delivery.2 Plaintiff states that she suffered $155 million in damages from the cancelled

government contract, which she alleges was cancelled due to the late delivery. (Id.). Plaintiff

attaches the following documents to her complaint: (1) a document from the Federal Emergency

Management Agency (“FEMA”) terminating Tribute’s government contract due to late delivery

of approved heater meals (Exhibit A), (2) an email between plaintiff and a TQL representative

about the late delivery (Exhibit B), (3) a shipper/broker transportation agreement between

Tribute and TQL (Exhibit C), and (4) a record showing that both plaintiff and Tribute are

disbarred from receiving government contracts (Exhibit D). (Doc. 1-1).

II. TQL’s Motion to Dismiss (Doc. 5)

A. Standard

In deciding a motion to dismiss under Rule 12(b)(6), the Court must accept all factual

allegations as true and make reasonable inferences in favor of the non-moving party. Keys v.

Humana, Inc., 684 F.3d 605, 608 (6th Cir. 2012) (citing Harbin-Bey v. Rutter, 420 F.3d 571, 575

(6th Cir. 2005)). Only “a short and plain statement of the claim showing that the pleader is

entitled to relief” is required. Id. (quoting Fed. R. Civ. P. 8(a)(2)). “[T]he statement need only

give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.” Id.

(quoting Erickson v. Pardus, 551 U.S. 89, 93 (2007) (internal quotation marks omitted) (quoting

Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)). A plaintiff must “plead factual

content that allows the court to draw the reasonable inference that the defendant is liable for the

misconduct alleged.” Id. (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)).

2 In her memorandum in opposition to defendant’s motion to dismiss, plaintiff states that her claim is for breach of

contract. (Doc. 7 at 1).

The Court must hold pro se pleadings to less stringent standards than those prepared by

attorneys and must liberally construe them when determining whether they fail to state a claim.

See, e.g., Martin v. Overton, 391 F.3d 710, 712 (6th Cir. 2004). However, the Sixth Circuit has

recognized that the Supreme Court’s liberal construction case law has not had the effect of

“abrogat[ing] basic pleading essentials” in pro se suits. Wells v. Brown, 891 F.2d 591, 594 (6th

Cir. 1989).

B. Resolution

Defendant moves to dismiss plaintiff’s complaint under Fed. R. Civ. P. 12(b)(6) for three

reasons. First, defendant argues that plaintiff fails to state a valid claim for relief against TQL

because there is no privity of contract between plaintiff, Tiffany Brown, and TQL. (Doc. 5 at 5-

7). Second, defendant argues that any potential claims arising out of Tribute’s relationship with

TQL are compulsory counterclaims that plaintiff failed to litigate in a prior state court lawsuit

and is therefore barred from asserting in this case. (Id. at 7-9). Third, defendant contends that

under the Carmack Amendment, claims for late delivery, loss, or damage to cargo must be

pursued against the motor carrier and not TQL since it is a freight broker. (Id. at 9-11).

As an initial matter, Ohio law governs plaintiff’s claim for breach of contract in this

diversity action. See Equitable Life Assur., Soc. of U.S. v. Poe, 143 F.3d 1013, 1016 (6th Cir.

1998) (in actions brought in federal court invoking diversity jurisdiction, a court must apply the

same substantive law that would apply if the action had been brought in a state court of the

jurisdiction where the federal court is located) (citing Erie R.R. v. Tompkins, 304 U.S. 64

(1938)). To maintain a cause of action for breach of contract, Ohio law requires privity of

contract. In Ohio, “privity of contract between parties . . . is a fundamental prerequisite to

bringing suit for the breach of a contract.” Mark-It Place Foods, Inc. v. New Plan Excel Realty

Tr., 804 N.E.2d 979, 990 (Ohio Ct. App. 2004). See also Cincinnati, H. & D. R. Co. v. Metro.

Nat. Bank, 42 N.E. 700 (Ohio 1896). Ohio does not recognize any remedy or action in contract

for two parties that lack privity. See Mahalsky v. Salem Tool Co., 461 F.2d. 581, 584 (6th Cir.

1972).

In ruling on a Rule 12(b)(6) motion to dismiss, the Court primarily considers the

allegations in the complaint but may also consider exhibits attached to the complaint. Amini v.

Oberlin Coll., 259 F.3d 493, 502 (6th Cir. 2001). Here, Exhibit C of plaintiff’s complaint shows

the existence of a shipper/broker transportation agreement between Tribute and TQL for TQL to

provide brokerage services for transportation of Tribute’s freight. (Doc. 1-1 at 7-13). Plaintiff’s

company—not plaintiff herself—is a party to the contract at issue. Although plaintiff signed the

agreement (Doc. 1-1 at 13), she did so in her capacity as the owner of Tribute. The Court

therefore agrees with defendant that the contract attached to the complaint shows that there is no

privity of contract between plaintiff and TQL.

In her brief in opposition, plaintiff argues that “Tribute Contracting LLC, is a single

member LLC, so the persona of Tribute Contracting LLC and Plaintiff are intertwined.” (Doc. 7

at 4). This argument is unavailing. “[A] corporation is a distinct legal entity, separate and apart

from the natural individuals who formed and own it.” Chafflose Corp. v. 3 M Innovation, No.

1:10-cv-2178, 2010 WL 4318872, at *1 (N.D. Ohio Oct. 27, 2010) (citations omitted). A

corporation is a separate legal entity from its shareholders, even where the corporation has only

one shareholder. Springfield v. Palco Invest. Co., Inc., 992 N.E.2d 1194, 1211 (Ohio Ct. App.

2013). “Because a corporation is a separate entity from its directors and officers, causes of

action belonging to the corporation may not be litigated by the officers for their own benefit.”

Chafflose Corp., 2010 WL 4318872, at *1. In her capacity as the owner of Tribute, plaintiff has

no standing to bring a cause of action against TQL for breach of contract. Moreover, plaintiff’s

argument that she is a third-party beneficiary to the contract between Tribute and TQL is equally

unavailing. Under Ohio law, a third-party may recover damages from a contract only when the

third-party is the intended beneficiary of the contract. G.R.P.L. Ents. Inc. v. Sethi, No. 09 MA

205, 2010 WL 5550680, at *2 (Ohio Ct. App. Dec. 16, 2010). To be an intended third-party

beneficiary, the contract “must have been entered into directly or primarily for the benefit of that

person.” Id. (internal citation omitted). Given that a corporation is a separate legal entity from

its owners, “a party is not considered a third-party beneficiary merely because [s]he is a

shareholder of one of the contracting parties.” Id. at *3. As the owner of Tribute, plaintiff is

therefore not an intended third-party beneficiary to the contract between Tribute and TQL.

In sum, plaintiff cannot maintain this action against TQL because no privity of contract

exists between plaintiff, as the owner of Tribute, and TQL. While Tribute may bring a breach of

action against TQL under its corporate identity, plaintiff has no standing to bring such a claim on

behalf of Tribute. Rowland v. California Men’s Colony, 506 U.S. 194, 202 (1993) (no one other

than a licensed attorney can represent a corporation in federal court). Therefore, defendant’s

motion to dismiss (Doc. 5) should be granted.3

III. Conclusion

Based on the foregoing, it is RECOMMENDED that:

3 The Court declines to consider defendant’s second and third grounds for dismissal—that plaintiff failed to assert a

compulsory counterclaim in state court and that plaintiff’s claims must be pursued against the motor carrier under

the Carmack Amendment. The facts of plaintiff’s complaint and the attachments thereto clearly show that there is

no privity of contract between plaintiff and TQL such that plaintiff cannot maintain a breach of contract claim

against TQL.

1. Defendant’s motion to dismiss (Doc. 5) be GRANTED and this case be CLOSED on

the docket of this Court.

It is ORDERED that:

1. Plaintiff’s motions to receive service by email through the electronic case filing

system (Docs. 2, 8) are DENIED as MOOT.

2. Plaintiff’s motion to access the electronic case filing system (Doc. 9) is DENIED as

MOOT.

Date: 3/18/2020 s/Karen L. Litkovitz

Karen L. Litkovitz

United States Magistrate Judge

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF OHIO

WESTERN DIVISION

TIFFANY BROWN, Case No. 1:19-cv-574

Plaintiff, McFarland, J.

Litkovitz, M.J.

vs.

TOTAL QUALITY LOGISTICS, LLC,

Defendant.

NOTICE

Pursuant to Fed. R. Civ. P. 72(b), WITHIN 14 DAYS after being served with a copy of

the recommended disposition, a party may serve and file specific written objections to the

proposed findings and recommendations. This period may be extended further by the Court on

timely motion for an extension. Such objections shall specify the portions of the Report objected

to and shall be accompanied by a memorandum of law in support of the objections. If the Report

and Recommendation is based in whole or in part upon matters occurring on the record at an oral

hearing, the objecting party shall promptly arrange for the transcription of the record, or such

portions of it as all parties may agree upon, or the Magistrate Judge deems sufficient, unless the

assigned District Judge otherwise directs. A party may respond to another party’s objections

WITHIN 14 DAYS after being served with a copy thereof. Failure to make objections in

accordance with this procedure may forfeit rights on appeal. See Thomas v. Arn, 474 U.S. 140

(1985); United States v. Walters, 638 F.2d 947 (6th Cir. 1981).